From axe to cash: Howard loosens purse strings for public service

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The Federal Government is rushing to sign up senior public sector employees with performance bonuses, in case Labor wins the coming election.

Confidential documents from the Department of the Environment show its executives have been offered a new Australian Workplace Agreement to be signed by September 10, even though the present deal does not expire until December 31.

This would ensure the agreement can be signed even if an election is held between these dates and the public service moves into caretaker mode.

Labor has said it will abolish the performance bonuses for senior officials if it is elected to government because they encourage public servants to give the advice their political masters want to hear.

A change of government is unlikely to stop the new contracts because they can only be terminated by agreement.

The performance bonuses for the department are estimated to cost $1.3 million. Under the previous agreement 163 senior officials signed and received $820,715 in performance bonuses.

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Other departments, such as Finance and Employment and Workplace Relations, as well as Telstra, are pushing employees to sign workplace agreements.

Labor plans to redirect the cost of the performance bonuses - which the Audit Office said amounted to $38.6 million across 63 agencies in 2002-03 - towards financing its tax policy, which will give cuts to people earning less than $52,000 a year.

Performance bonuses at the top are part of the shake-up of the public service under the Howard Government. It began by cutting 10,000 jobs, but since then it has reshaped aspects of the public service, using it to promote its industrial relations agenda and handpicking top bureaucrats.

Under the changes, some senior public servants have received performance pay for the first time, usually between 4 and 12 per cent.